ANNUAL REPORT 2009 and financial statements 2008
ANNUAL REPORT 2009 and financial statements 2008
ANNUAL REPORT 2009 and financial statements 2008
TABLE OF CONTENTS Company Profile
5
Board of Directors
6
Chairman’s Message
7
Chief Executive Officer’s Statement
8
Electricity Division
9
Petroleum Division
24
Gas Division
28
Information Communication Technology
31
Human Resources and Corporate Services
34
Finance Division
43
Financial Statements 2008
49
3
ANNUAL REPORT 2009 and financial statements 2008
COMPANY PROFILE Set up in 1977, Enemalta Corporation remains the main provider of energy generation and distribution in the Maltese Islands. Throughout the years, Enemalta has been instrumental in pioneering the usage of new technology to reach its corporate objectives together with offering better products and the best service to its customers. Enemalta continues to invest in all areas of its operations making best use of technological developments and is committed to continue to improve its service delivery through a pro-active approach, to meet an ever-growing and diversified demand for energy. Today, the Corporation is becoming more focused on environmental considerations to create a safer and more sustainable environment for the Maltese people.
5
BOARD OF DIRECTORS Mr. Edmund Gatt Baldacchino (Acting Chairman) Ing. Sarah Pulé M. Phil., B.Eng (Hons)., P.G.CE. Mr. Joseph G. Cutajar FIRM ACII Mr. Frank Xerri de Caro ACIB Ms. Vivienne Galea Pace Mr. William Spiteri Bailey F.I.Q., C.P.A., M.I.M. Ms. Simone Vella B.Sc Mr. Paul Buttigieg Dr. Noel Buttigieg Scicluna LL.D.(Board Secretary) The term of office of Ing. Alexander Tranter ended on the 31st May 2010. Mr Edmund Gatt Baldacchino took up office on the 1st June 2010.
6
ANNUAL REPORT 2009 and financial statements 2008
Chairman’s Message The supply of energy was one of the greatest challenges faced by Malta in 2009. The international price of oil, which in the past years reached levels never seen before in history, placed a heavy burden on our country which is totally dependant on the purchasing of oil from abroad to provide an energy supply to its residents. These volatile oil prices strengthened further the necessity for better management of the Maltese grid. It highlighted the importance of the interconnector between Malta and Sicily, a major project which will see the Maltese national electricity grid connected with a sub-sea interconnector, linking Malta to Sicily by the end of 2012. This project will provide Malta with the first opportunity to widen the country’s energy mix, not only by providing a gateway into the European grid, but also by offering the option to consider purchasing electricity generated from renewable sources. It also highlighted the need to better
distribute our resources, something which Enemalta will achieve with the help of the SCADA system and the implementation of the Smart Meters. These two projects will also make Malta the first country to have a smart grid. The year 2009 also presented the pressing need for the Delimara 144MW extension. The new plant will improve overall efficiency, reduce the amount of fuel consumed and considerably decrease emissions. This project is moving the Corporation a step closer to the decommissioning of the Marsa Power Station which now has aged considerably. Another challenge we are currently faced with, is the environment. Being one of the greatest challenges facing society today, climate change is at the forefront of Enemalta’s agenda. All the projects mentioned above will help the Corporation go beyond the 20% reduction of emissions by 2020 as stipulated by the EU, providing the Maltese population with cleaner energy and cleaner air.
Throughout the year, the Privatisation Unit has continued negotiations with the preferred bidder to commercialise the Petroleum Division. Once negotiations are finalised, Enemalta will be able to concentrate on its core activity - the production and distribution of electricity. Such major projects need great coordination within the Corporation, and I have no doubt that all Enemalta employees will do their bit to help Enemalta finalise successfully these targets whilst surpassing any other challenges along the way.
Edmund Gatt Baldacchino Acting Chairman Enemalta Corporation
7
Chief Executive Officer’s Statement The year 2009 was a very challenging year for Enemalta and for all operators. We were hit by a severe recession and with continuous volatile oil prices which were extremely hard to predict. Some very hard choices had to be made. Nonetheless, with technical expertise and a sound knowledge of the business we were able to make these choices sensibly, keeping in mind the Corporation’s impact on the Island’s economy and its objective to provide the best value for our customers. Suffering two national power cuts, 2009 highlighted the justification of a new long term strategy and further investment. The 144MW Delimara extension project will enable Enemalta to meet both the electricity demands of the local market and also EU targets with regards to CO2 emissions. The interconnector between the Maltese Islands and Sicily will connect us to the European grid ensuring a stable supply of electricity and will provide the nation with an opportunity to purchase greener, cleaner energy. The past year marked a significant milestone in the implementation of the IUBS contract signed in 2008. This project is moving at the expected pace and following the implementation of the Enterprise Resource Planning (ERP) system across the Corporation. In January 2010 the project moved on to the
8
next two phases, the implementation of the Business Intelligence system which allowed the Corporation to have an information system which supports decision making, and the Enterprise Asset Management (EAM) system through which all the assets of the Corporation will be properly tracked and will provide a quantum leap in tracking expenses linked to an asset plus a better asset maintenance planning programme. The next phase will deal with the national rollout of the Smart Meters which will make Malta the first country to be completely on a smart grid. This system will play a central role in the future of the island’s energy system. The Supervisory Control and Data Acquisition system, also known as SCADA, will enable the Corporation to control any Distribution Centre through continuous monitoring and will give a timely warning of any abnormalities before failure occurs, while the Smart Meter will help Enemalta to better manage the distribution of electricity and the customer to better monitor their consumption. Taken as a whole, our targets and major projects are indicative of our underlying approach and reflect one common goal: “To meet the energy needs and expectations of the customer in a safe, efficient and profitable manner whilst safeguarding the environment.” Ahead of us is a year brimming with challenges and critical targets but I believe there is tremendous commitment
from everyone within the Corporation. I am confident that ultimately success will be achieved; all we need is to be provided with a fair chance to prove ourselves to the Maltese public, something which we are relentlessly doing on a daily basis.
Ing. Karl V.A. Camilleri Chief Executive Officer Enemalta Corporation
ELECTRICITY DIVISION
9
Electricity Generation The Corporation continued to cater for the electricity needs in the Maltese islands, through its two power stations, the one at Marsa and the other at Delimara with an installed capacity of 267MW and 304MW respectively. In 2009 there had been a drop of 6.2% in the amount of units generated. This was also reflected in the maximum peak demands, where in certain months it was lower by up to 10%. The reason for this drop was mainly attributed to the rise in electricity tariffs. This rise in tariffs reduced a large amount of wastage that the Maltese families were accustomed to. The weather conditions though, still played a dominant factor in the use of electricity, and the demand for electricity fluctuated irregularly during the past months. The peak demand registered in August 2009, was 403MW as compared with the 424MW maximum demand in the previous year. All efforts were made to keep the plant at Marsa in optimum operating condition, by means of regular inspections, overhauls and maintenance. The statutory inspections of pressure vessels, boilers and safety equipment were carried out as in previous years. Similar procedures were adopted to the turbines and auxiliaries to prevent forced shut downs particularly during the peak summer months.
10
Other major works carried out at the Marsa Power Station included: ■ turbine No. 4 trust bearing inspections and repair; ■ turbine No. 4 replacement of most sea-water pipe work; ■ change-over of Turbine No.6 to new Siemens switchgear; ■ fuel Tank No. 2 inspection was completed; ■ re-circulation lines on feed-pumps Nos. 5 to 7 were completed; ■ turbine No. 8 inspection: replacement of H2 seal, HPH tube leak; rehabilitated seawater discharge line ‘B’ and repaired throttle valve.
The long-serving plant at the Marsa Power Station, continues to prove a great burden to the maintenance section, since the number of faults and breakdowns being registered are on the increase. The replacement of seawater lines, boiler tube leaks, feed pump failures, damaged bellows and burnt motors all reflect this situation. A new automatic emission monitoring system was commissioned and the QAL 2 were conducted. The system was thus calibrated in July and with the new system now in service, emissions from the station are being adequately monitored online and all readings duly recorded.
ANNUAL REPORT 2009 and financial statements 2008
SYSTEM GENERATION FIGURES Actual
Actual
2008
2009
1,058,949
966,151
5,739
5,900
859,904
836,970
Total Generating Capacity MWh Generated Marsa B Stn (Steam) MWh Generated Marsa B Stn (Gas) MWh Generated Delimara Stn (Steam) MWh Generated Delimara Stn (Gas)
4,975
15,756
382,504
342,863
2,312,071
2,167,400
127,142
121,705
2,184,929
2,045,935
System maximum demand (MW)
424
403
System maximum demand (MVar)
210
165
329,102
303,029
2,339
2,338
228,169
220,457
Gas Oil (Delimara)
2,020
5,541
Gas Oil (Delimara CCGT)
77,803
69,609
Steam Units Marsa
0.311
0.314
Steam Units Delimara
0.265
0.263
Gas Turbine Unit Marsa
0.408
0.396
Gas Turbine Unit Delimara
0.406
0.352
CCGT
0.203
0.203
Steam Units Marsa
82.23
78.49
Steam Units Delimara
95.10
92.40
Gas Turbine Unit Marsa
38.76
39.65
Gas Turbine Units Delimara
42.10
46.90
CCGT
70.40
70.00
Steam Units Marsa*
26.67
26.27
Steam Units Delimara*
31.78
31.86
Gas Turbine Unit Marsa
20.43
21.09
Gas Turbine Units Delimara
22.09
23.77
CCGT
39.48
39.28
MWh Generated Delimara Stn (CCGT) Total MWh Generated Units consumed in Stations (MWh) Units sent out from Station busbars (MWh)
Fuel Consumption (Mtons) Heavy Fuel Oil (Marsa) Gas Oil (Marsa) Heavy Fuel Oil (Delimara)
Fuel Rates (Kg/Kwh)
Plant Capacity Factor %
Station Thermal Efficiency %
* Efficiency calculated on Net CV
11
GENERATING PLANT DATA 2009 Plant
Commissioned
Capacity MW
Running Hours
MWH Gen
% of System’s Requirements
966,151
44.57%
5,900
0.27%
836,970
38.61%
15,756
0.73%
342,863
15.82%
2,167,640
100.00%
Marsa Station (Steam) 1 - F Tosi
1966
10
2 - F Tosi
1966
10
2,629
3 - F Tosi
1970
30
6,903
4 - F Tosi
1970
30
3,402
5 - GE (1956)
1982*
30
3,478
6 - GE (1956)
1983*
30
6,476
7 - Ansaldo (1956)
1984*
30
7,600
8 - CA Parsons (1959)
1987*
60
6,490
Marsa Station (Gas) 9 - GEC Alsthom
1990
37
1 - BHEL
1991
60
2 - BHEL
1992
60
419
Delimara Station (Steam)
Delimara Station (Gas) 1 - John Brown
1995
37
2 - John Brown
1995
37
Delimara Station (CCGT) 1 - GT Nuovo Pignone
1999
37
2 - GT Nuovo Pignone
1999
37
3 - ST Nuovo Pignone
1999
36
* Refurbished Plant
12
ANNUAL REPORT 2009 and financial statements 2008
Generation Projects – Delimara Power Station NEW ELECTRICITY GENERATION PLANT FOR DELIMARA POWER STATION Following approval given by the Department of Contracts to the technical adjudication report in December 2008, the final commercial bids for the new generation plant were submitted in February 2009. These bids were evaluated and adjudicated and referred to the Department of Contracts for approval. Following the above, final negotiations were concluded with BWSC of Denmark and the contract for the new plant was signed on the 27th May 2009. The new plant is a combined cycle diesel engine type. It consists of 8 Wartsila 18V46 engines and has a total generating output of 148MW. Civil works on this project started in October 2009 and excavations are now in progress. APPLICATION FOR THE REGULARITY APPROVALS FOR THE NEW GENERATION PLANT The Environmental Impact Statement for the construction of the new plant was submitted by AIS Limited (The EIA consultants) to MEPA, in August 2009. The public consultation process was carried out during September. As part of the environmental planning process, Enemalta gave a series of presentations to NGOs and Government entities including Local Councils’ representatives, on the operation of the new plant. An application for the extension of the
Delimara Power Station was also submitted to the Malta Resources Authority in August 2009.
Planning and Development The Development Section is responsible for the short and long-term planning and the implementation of reinforcement schemes for the high voltage network, aimed to meet demand growth and provide adequate electricity supply to the Maltese islands. The Section is also responsible for the operation and maintenance of the high voltage network. 132kV NETWORK DEVELOPMENT During the past months the Planning Section has revised its long-term plan for the 132 kV network and primary substations, to take into consideration the increased generation facilities at Delimara Power Station, the eventual shutting down of the Marsa Power Station, the commissioning of an interconnection with the European grid and the possibility of a large offshore wind farm. These developments required several significant changes to the network, to cater for relocation of the power sources connected to the grid. Following the revision of the network long-term plan, the Development Section has issued a tender for a new 132kV Distribution Centre at Kappara. The building of the primary substation is completed and underground tunnels for the 132kV supply cables are now under construction. The 132kV Distribution Centre at Kappara is expected to be completed in 2011.
THE EUROPEAN INTERCONNECTOR Enemalta has commissioned the Transmission System Operator, TERNA, to jointly study in detail, the viability of an electrical interconnection between Malta and Sicily. The study has assessed various technical options, the impact on the Maltese and Sicilian High Voltage networks, took into account environmental considerations, carried out cost-benefit analysis and provided guidance on commercial and regulatory issues regarding electricity interconnections. The feasibility study has been concluded and Enemalta has issued a call for expression of interest for the supply and installation of a submarine cable link between the European grid and the Enemalta High Voltage network. This is the first step in the issue of a tender for the European Interconnector. Offers are being evaluated. Enemalta has also successfully applied for EU funding for this project under the European Energy Programme for Recovery. NATIONAL SCADA PROJECT As part of the IUBS project, Enemalta has awarded a contract for the provision of a SCADA system and control centre for the high Voltage transmission and distribution networks. This is a three year contract, during which, the contractor will provide the equipment and expertise for the installation of a new control centre at Marsa, from where Enemalta would be able to control and supervise all its primary substations. This will increase the reliability of supply and would ensure a more rapid remedial action in case of supply failure.
13
33kV NETWORK DEVELOPMENT During the year 2009 the Development Section commissioned one new 33kV circuit. Three others are in the course of completion. The first circuit is a 10km cable from Mosta Distribution Centre to Bugibba Distribution Centre and this will increase the reliability of supply to the localities of St. Paul’s Bay, Bugibba and Qawra. The other three 19km circuits have replaced two overhead line circuits and have substantially increased the network capacity to the northern part of Malta and to Gozo. Underground cables have been utilised for these circuits to reduce the negative impact on the environment and decrease the adverse effect of inclement weather on the reliability of supply. A tender for the provision of four new 33/11 kV Distribution Centres was also issued. These Centres will increase the High Voltage network capacity to several localities including Sliema, Paceville, Swieqi, Gozo and Zabbar. These projects are expected to be completed by 2012. 11kV NETWORK AND SUBSTATION REINFORCEMENT During 2009 the Development Section has continued to reinforce the 11kV network by
14
commissioning 30 new Distribution Substations. Various 11kV reinforcement projects were also implemented. HIGH VOLTAGE NETWORK MAINTENANCE The Maintenance Section has carried out routine maintenance in 189 Distribution Substations together with the 10 year maintenance exercise on the 132kV switchgear at the Marsa South Distribution Centre. The 33/11kV switchgear and transformer equipment in the various Distribution Centres were also maintained. During the year, a contract was awarded for the replacement of the old 11kV switchgear at the Tarxien Distribution Centre and for the installation of a new control system at this Centre. These works form part of a long-term plan for the replacement of equipment that is approaching the end of its economic life and for the installation of control systems in the various Distribution Centres. As part of the IUBS contract, the Maintenance Section is also involved in the provision of an Asset Management System, which is considered a useful tool for scheduling maintenance works, asset refurbishment and replacement.
ANNUAL REPORT 2009 and financial statements 2008
New Indoor Substations & Outdoor Transformer Centres Commissioned – Malta Substations with 500kVA Transformer Naxxar Wied Filep Luqa n/s in Valletta Rd (PJ.Sutters) Xemxija Katerina Vitale Fgura Kunsill Ta' L-Ewropa (HSBC) Valletta St. Christopher Xg˙ajra Fortizza Tal-Grazzja (Eastend) Pembroke Kurunell Lorenzo Manché (Primary School)
Substations with 800kVA Transformer Mellieha Marlozz (Michele Ville) Zebbug Achille Ferris
Substations with 1000kVA Transformer Fgura Louis Schickluna (Alpha Court) Ûejtun Pres.A.Buttigieg (Lasco) Naxxar Andrea Debono (Etoile) Óamrun Dun Frans Camilleri St.Paul's Bay Stella Maris Qawra Nawciera Bahrija Qastan Swieqi Kaffis Mosta Triq Il-Kbira (Eureka Court) Attard Triq Il-Mit˙na (Tar-Razzett)
Substations with 1600kVA Transformer Mrie˙el L-Arkata L-Baxxa San Ìwann UB16 Tx.1 San Ìwann UB16 Tx.2 St.Julian's Pendergardens (SS4) Sliema Tigné T2 Tx.1 Sliema Tigné T2 Tx.2 Sliema Tigné T14 Tx.1 Sliema Tigné T14 Tx.2 GΩira William Reid (Savoy Gardens) Qormi Nylon Knitting No.3 Tx.1 Qormi Nylon Knitting No.3 Tx.2 Óal Far HF26 (Aurobindo) Ta’ Qali Idwart Net Increase TOTAL NO. OF TRANSFORMERS TOTAL NO. OF SUBSTATIONS
35,900 32 28
15
New Indoor Substations Commissioned - Gozo Substations with 500kVA Transformer Qala Villa©© San ÌuΩepp Substations with 1600kVA Transformer Victoria Duke Net Increase
2,100
TOTAL NO. OF TRANSFORMERS
2
TOTAL NO. OF SUBSTATIONS
2
TOTAL INCREASE OF TRANSFORMER CAPACITY IN MALTA AND GOZO : 35,900 + 2,100 = 38,000kVA
132kV & 33kV DISTRIBUTION CENTRES IN OPERATION IN THE MALTESE ISLANDS MALTA Bu©ibba D.C.
2x30 MVA
(33 kV/11 kV)
60 MVA
Freeport D.C.
2x30 MVA
(33 kV/11 kV)
60 MVA
Óal-Far D.C.
2x22.5 MVA
(33 kV/11 kV)
45 MVA
Marsa South D.C.
2x50 MVA
(132 kV/11 kV)
100 MVA
Marsa South D.C.
1x90 MVA
(132 kV/33 kV)
90 MVA
Mellie˙a D.C.
2x10 MVA
(33 kV/11 kV)
20 MVA
Mosta D.C. (132kV)
2x90 MVA
(132 kV/33 kV)
180 MVA
Mosta D.C. (132kV)
2x50 MVA
(33 kV/11 kV)
100 MVA
Msiera˙ D.C.
2x22.5 MVA
(33 kV/11 kV)
45 MVA
Paceville D.C.
2x30 MVA
(33 kV/11 kV)
60 MVA
Pembroke D.C.
2x12.5 MVA
(33 kV/6.3 kV)
25 MVA
St. Venera D.C.
2x30 MVA
(33 kV/11 kV)
60 MVA
Tarxien D.C.
3x22.5 MVA
(33 kV/11 kV)
67.5 MVA
Vendome D.C.
2x6 MVA
(33 kV/11 kV)
12 MVA
New Hospital D.C.
2x15 MVA
(33 kV/11 kV)
30 MVA
New Hospital D.C.
1x22.5 MVA
(33 kV/11 kV)
22.5 MVA
Valletta D.C.
3x22.5 MVA
(33 kV/11 kV)
67.5 MVA
Kirkop D.C.
2x22.5 MVA
(33 kV/11 kV)
45 MVA
Marsascala D.C.
1x22.5 MVA
(33 kV/11 kV)
22.5 MVA
Qala D.C.
2x30 MVA
(33 kV/11kV)
60 MVA
Comino D.C.
2x6.3 MVA
(33 kV/11kV)
12.6 MVA
GOZO
16
ANNUAL REPORT 2009 and financial statements 2008
11kV DISTRIBUTION TRANSFORMERS IN SERVICE IN MALTA End Dec 2009
End Sept 2008
Increase
Decrease
Transformer Rating kVA
No.
Total Capacity kVA
No.
Total Capacity kVA
No.
kVA
No.
kVA
25
0
0
1
25
-
-
1
25
50
18
900
17
850
1
50
-
-
100
26
2,600
28
2,800
-
-
2
200
200
1
200
1
200
-
-
-
-
237
3
711
3
711
-
-
-
-
250
81
20,250
82
20,500
-
-
1
250
300
3
900
3
900
-
-
-
-
315
3
945
3
945
-
-
-
-
500
236
118,000
222
111,000
14
7,000
-
-
750
45
33,750
46
34,500
-
-
1
750
800
198
158,400
199
159,200
-
-
1
800
1,000
323
323,000
309
309,000
14
14,000
-
-
1,500
60
90,000
60
90,000
-
-
-
-
1,600
259
414,400
252
403,200
7
11,200
-
-
2,000
7
14,000
8
16,000
-
-
1
2000
3,000
1
3,000
0
0
1
3,000
-
-
5,000
2
10,000
2
10,000
-
-
-
-
7,500
2
15,000
2
15,000
-
-
-
-
TOTAL
1268
1,206,056
1238
1,174,831
37
35,250
7
4,025
NET INCREASE OF TRANSFORMERS - 30 NET INCREASE OF - 31,225 kVA
17
11kV DISTRIBUTION TRANSFORMERS IN SERVICE IN GOZO End Dec 2009
End Sept 2008
Increase
Decrease
Transformer Rating kVA
No.
Total Capacity kVA
No.
Total Capacity kVA
No.
kVA
No.
kVA
50
1
50
1
50
-
-
0
0
100
7
700
7
700
-
-
-
-
250
27
6,750
27
6,750
-
-
0
0
500
50
25,000
48
24,000
2
1,000
-
-
750
5
3,750
5
3,750
-
-
0
0
800
14
11,200
14
11,200
0
0
-
-
1,000
13
13,000
14
14,000
-
-
1
1,000
1,500
3
4,500
3
4,500
-
-
-
-
1,600
9
14,400
8
12,800
1
1600
-
-
TOTAL
129
79,350
127
77,750
3
2,600
1
1,000
NET INCREASE OF TRANSFORMERS - 2 NET INCREASE OF - 1,600 kVA TOTAL INSTALLED TRANSFORMER CAPACITY IN MALTA & GOZO Total installed transformer capacity at end of September 2007 in Malta and Gozo Net increase during year up to end of December 2008 in Malta and Gozo Total installed transformers capacity at end of December 2008 in Malta and Gozo
1,174,831 + 77,750 = 1,252,581 kVA 31,225 + 1,600 = 32,825 kVA 1,206,056 + 79,350 = 1,285,406 kVA
Net Increase In Distribution Transformer Capacity From 1985/1986 To 2009
18
Year
Net Increase Of Transformers
Net Increase KVA
1985-1986
31
23,778
1986-1987
26
27,175
1987-1988
19
41,979
1988-1989
14
22,467
1989-1990
25
32,487
1990-1991
27
44,851
1991-1992
27
52,000
1992-1993
26
47,690
1993-1994
29
33,525
1994-1995
26
52,838
1995-1996
30
33,775
1996-1997
38
34,025
1997-1998
50
53,565
1998-1999
18
25,190
1999-2000
37
48,500
2000-2001
29
36,300
2001-2002
33
41,465
2002-2003
35
37,765
2003-2004
33
38,815
2004-2005
35
45,800
2005-2006
42
49,237
2006-2007
14
19,800
2007-2008
36
45,700
2009
32
32,825
ANNUAL REPORT 2009 and financial statements 2008
Change Of Transformer Capacity Of Existing Substations & TC’s - ( MALTA ) LOCALITY/NAME
FROM
TO
QTY
kVA INCREASE
kVA DECREASE
G˙ajn Tuffie˙a tat-Tafal
25
50
1
25
/
M©arr il-Ballut Ûebbu© Gianpula
100
250
2
300
/
M©arr Barbara
500
1,000
1
500
/
Luqa Warehouse
500
1,600
1
1,100
/
Mosta tad-DiB
750
1,000
1
250
/
Marsa Cold Stores
800
1,000
1
200
/
Corradino Grain Silo
0
3,000
1
3,000
/
Xwieki Quarry No. 10 Mosta Kultellazz Gudja Housing Estate
800
500
3
/
900
Burmarrad Price Club Ûebbu© New Óal Mula St. Paul’s Bay Housing Estate (Qarbuni) Xemxija BP Rabat Buskett Road Ûebbu© Miekelan© Sapiano
1,000
500
6
/
3,000
Naxxar San Pawl Tat-Tar©a
1,000
800
1
/
3,000
Mosta Housing Estate Qormi Ta’ FarΩina H.E. G˙axaq Borehole
1,600
1,000
7
/
4,200
Qormi Chatillon Tx.1
2,000
1,000
1
/
1,000
M’Scala Latmija T/C M’Scala Bidni T/C Stella Maris T/C
250
0
3
/
750
1,000
0
0
/
0
1,600
0
0
/
0
5,375
10.050
Qawra Gallina Ba˙˙ara St. Paul’s Bay Dawret il-GΩejjer Ûebbu© Mill Luqa Wil©a
TOTAL
NET DECREASE OF 2 TRANSFORMERS NET DECREASE OF 4,675 kVA Change Of Transformer Capacity Of Existing Substations & TC’s - (GOZO) LOCALITY/NAME M©arr Marina TOTAL
FROM
TO
QTY
kVA INCREASE
kVA DECREASE
50
0
o
/
0
1,000
500
1
/
500
0
500
NET DECREASE OF 0 TRANSFORMERS NET DECREASE OF 500 kVA TOTAL NET INCREASE MALTA AND GOZO : 38,000 - 4,675 - 500 = 32,825kVA
19
Civil Engineering Section The Civil Engineering Section has embarked on various projects to assist in the planning and design of buildings required at the various Divisions of the Corporation. This Section is entrusted with the location of suitable sites for electricity substations and providing designs according to planning criteria when submitting applications for development permits. Projects are then duly supervised, to ensure that all works are carried out according to the approved plans. This is a lengthy process which many times involves lengthy negotiations with other government departments, to ensure the best possible use of government land. When substation buildings are completed, these are passed over to the Development Section to be duly equipped and energised. Several maintenance works were carried out on existing structures. Around 30 substations were maintained by the Corporation period contractors. Most of them required pointing, rendering and painting, while several others had to have their roof replaced and a new damp proof membrane installed. Some structural elements had to be repaired or completely replaced and an ad hoc contractor had to be hired for this work. Every year the Section utilizes the services of several contractors for various civil engineering projects, particularly on trenching works. In such cases, Section personnel are only involved in the application
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process for the acquisition of the required permits from the Malta Environment and Planning Authority and the Malta Transport Authority and for the supervision of the top tarmac surface layer only. The trenching permits system was also updated to facilitate procedures for the other Corporation engineers. A new three year contract was signed with interested contractors on revised bill of quantities for Corporation projects. New items were introduced and prices were amended to reflect the current trend in the building industry. The new contract includes maintenance as well as new construction and is not limited to substations only but may be also utilized for others works required across the Corporation. These period contractors will assist in reducing the times for the approval of minor works, some of which may be routine but others may be of very urgent nature. The normal tendering procedures will invariably be followed. 132 kV AND 33kV TUNNELS The main tunnel from Delimara Power Station to Marsa South Distribution Centre was completed and it is expected to be handed over shortly. Plans for the new tunnel from Marsascala to Smart City Malta were also prepared and the necessary design drawings completed. Construction and excavation works from the Marsascala side were also taken in hand. The geology tests carried out confirmed that very hard coralline limestone rock is to be excavated and thus progress on these works will not be as fast as originally expected.
GAS AND PETROLEUM DIVISIONS The Civil Engineering Section actively assisted in the Gas and Petroleum Divisions privatization process by preparing an extensive number of drawings required in processes. Several maintenance and other minor construction works were also completed on various sites and premises managed by these Divions to keep them in an optimum operational condition. OTHER PROJECTS Once construction works on the Kappara Distribution Centre were completed, attention was focused on the Xewkija Gozo District Office and Distribution Centre. The archaeological remains which were found on site were cleaned with the assistance of a professional archaeologist and adequately preserved. Plans for the District Office were altered and structural elements were introduced to allow these finds not to be destroyed in the course of construction. The Distribution Centre is practically complete and only some minor finishing works remain outstanding. Other tenders were also awarded. These include alterations and refurbishment works for the Tarxien Distribution Centre and the excavation of the escape shafts of the main tunnel. The tender for the Marsa Power Station roof replacement has also been adjudicated.
ANNUAL REPORT 2009 and financial statements 2008
Electricity Distribution The Distribution Section, fully aware of the Corporation’s mission, to provide the best possible service to its many consumers, fully commits its resources to ensure an adequate and reliable supply of electricity to the community. The need for the extension and reinforcement of the transmission and distribution networks, brought about by the widespread property development in various localities in Malta and Gozo, continues to tax in no small way, the Section’s resources. 11kV DISTRIBUTION SYSTEM During the past year, several high voltage deviations and reinforcement works were carried out, in line with the Section’s on-going programme for the reinforcement of the transmission and distribution networks, which are the arterial feeds by which electrical energy is conveyed to the end user. A number of substations and transformers were also commissioned to meet the evolving load demands.
introduced some years ago, to extend service and provide metering equipment concurrently, is still rendering very good results. Metering As in previous years, the Section focused its activities on revenue protection, meter replacements and inspections. More than 19,300 meters of various types were installed in Malta and Gozo during the past twelve months. The Corporation continued with its efforts to detect illicit connections and curb abuses. A total of 13,544 surprise inspections were carried out and in 222 cases meters were found to have been tempered with or not functioning correctly. These were referred for further investigation. The planning and implementation of the first phase of the Automatic Meter Reading project was taken in hand and the pilot exercise involving the replacement of 5,000 electricity meters is well in hand. Reinforcement Low voltage reinforcements were carried out in various localities in Malta and Gozo to rectify low voltage problems and enhance the quality of supply. A total of 66 new feeders were commissioned.
LOW VOLTAGE SYSTEM Services The Section continued to provide new services to general consumers and other entities applying for electricity supply. A total of 5,585 new consumers were connected to the system during the past twelve months. The Corporation makes every effort to accommodate requests for electricity service in the shortest time possible and the new policy
Maintenance The Corporation continued with its on-going maintenance programme to ensure that the electricity network is kept at an optimum level. Some 7,638 breakdown calls were attended. More than 3,200 service cable/ boxes were replaced. High voltage overhead line maintenance works were carried out on a span of about 66 kilometres of cable.
Street Lighting System More than 40,000 street lamps are currently connected to the system. Maintenance on street lighting in areas not yet devolved to Local Councils continued as scheduled. Every effort is made to repair street lamps within the shortest time possible to avoid undue nuisance to the residents in the localities concerned. Transport Several new vehicles were added to the Transport fleet managed by this Section replacing both hired cars and old Enemalta vehicles. The delivery of fifteen tower ladders is also expected shortly. District Offices The new Gozo District Office is in an advanced stage of construction and is expected to be completed shortly. Refurbishment works on the former Mosta Distribution Centre are currently in hand. The new building is intended to house the Mosta District Offices, where currently the space available is not adequate to handle operations in this locality. The extension to the Bugibba District Office to house employee gang rooms is also nearing completion. Meetings with the ICT Section Several meetings were held with the Information Technology Section on the setting up of the Geographical Information System. Structural works are progressing satisfactorily while the requisite database is already in hand.
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AMR (Automated Meter Reading) The communication problems encountered with the remote reading of CT (Current Transformer) operated three-phase meters have been solved. The trials of fifty such meters were successfully completed during the year. Energy Saving Initiatives The tender for street lighting dimming has been published and it is being currently adjudicated. Trials with LED street lighting lamps have been carried out. However results obtained so far, have proved inconclusive.
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ANNUAL REPORT 2009 and financial statements 2008
23
PETROLEUM DIVISION
24
ANNUAL REPORT 2009 and financial statements 2008
responsibilities The Petroleum Division is responsible for the planning of all petroleum products imports, including Liquid Petroleum Gas and fuel Oils for the power stations and for their internal marketing. The Division also caters for the storage and distribution of these products in the Maltese islands and also offers excellent storage facilities to international oil companies, at Óas-Saptan and Ras ÓanΩir complexes. The Division regularly maintains its various depots and installations in order to keep these in optimum condition. These include the installations at Birzebbugia, Óas-Saptan and Ras ÓanΩir, and the Depots at Wied Dalam and Luqa airport. This was the first year in which the Corporation was exposed to competition in the distribution of fuels on the inland market. Other oil companies in Malta, that previously enjoyed a free hand in the bunkering business, have now been given a licence by the Malta Resources Authority, to import and distribute fuels locally, thus entering into direct competition with Enemalta. So far, this concession was only limited to diesel and heating oils. The commercialisation process of the Petroleum Division is almost complete and only a few details need to be ironed out to finalise this exercise. FUEL IMPORTS During the past financial year 831,612 metric tonnes of petroleum products were imported for local consumption. The total fuel oil imported for use at the two power stations amounted to 61% of all fuel purchased.
Imports in Metric Tonnes Products
2008
Average/ mnth
2009
Average/ mnth
monthly % Change
Gas Oil
109,433.879
7,296
84,014
7,001
-4.0
Diesel (EN590)
123,461.438
8,231
81,352
6,779
-17.6
Unleaded Petrol
86,678.941
5,779
71,326
5,944
+2.9
Jet A1
148,368.838
9,891
61,030
5,086
-48.6
Fuel Oil
722,136.282
48,142
506,102
42,175
-12.4
LHO/HGO
7262
484
6,295
525
+8.5
Avgas
110.201
7.35
108
9
+22.4
LPG
26,813.871
1,788
21,005
1,750
-2.1
Propane
383.487
25.6
379
31.5
+23
TOTAL
1,224,649
81,643
831,612
69,301
-15.1
Although there appears to be a 12.4% drop in the total amount of fuel imports, one is to take into account the fact that last year’s financial year covered a period of fifteen months. In fact, this year there has been a 4.4% increase in the amount of fuel imported when compared to a similar twelve month period over the previous year. This is in line with the
trends shown in recent years. All petroleum products purchased were in line with European specifications. Calculated on a month by month basis, the imports of petroleum products suffered a substantial drop of 15.1% when compared to the previous financial year. The biggest
25
SALES in Metric Tonnes
decrease registered was in the importation of JET A1, amounting to around 49%. The drop in demand for this product was due to the financial crises that hit the world markets and left a negative impact on the tourism sector. Moreover, Enemalta opted to maintain a smaller backup stock (due to reduced demands) and utilize its reserves of the product rather than importing more fuel, to meet demands. Another substantial drop of around 18% was registered in the importation of EN590 diesel for the service stations. Apart from the general downward trend in the consumption of fuel products, this decrease can mostly be attributed to the liberalisation of the inland petroleum market, where Enemalta had to surrender part of its market to local competition. Another trend shown in the importation table, is the increase in the purchase of Light Heating Oil when compared to the drop in sales of this product for the same period last year. This can be explained by the fact that last year product purchases were made during a 13 month period and not over a 15 month period as happened with other products. This pushes the import average to 559 metric tonnes per month. Thus the importation of Light Heating Oil / Heavy Gasoil, has in 2009, actually dropped by 6 per cent (and not increased by 8.5% as one may erroneously conclude). This is more in line with the actual sales of this product. SALES The sales of petroleum products during the financial year under review, amounted to 854,262 metric tonnes. On a monthly basis, this figure is more than 10% lower than that
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Products
2008
Average/ mnth
2009
Average/ mnth
% Change
Gas Oil (total)
95,639.921
6375.995
76,139
6,345
-0.5
Gas Oil (MPS)
2,067.130
137.809
2,171
181
+31.2
Gas Oil (DPS)
93,572.791
6238.186
73,968
6,164
-1.2
Diesel (EN590)
123,706.365
8,247.091
79,254
6,605
-19.9
Unleaded Petrol
73,953.519
4,930.235
63,284
5,274
+7.0
LRP
14,016.953
934.464
9,477
790
-15.4
Jet A1
114,565.047
7,637.670
88,805
7,400
-3.1
Kerosene
1,639.283
109.286
1,081
90
-17.4
Fuel Oil (total)
716,011.809
47,734.121
502,204
41,850
-12.3
Fuel Oil (MPS)
418,285.180
27,885.568
294,688
24,557
-11.9
Fuel Oil (DPS)
297,726.629
19,848.442
207,516
17,293
-12.9
Thin Fuel Oil
8,162.000
544.133
4,929
411
-24.4
LHO / HGO
14,786.029
985.735
7,609
634
-35.7
Avgas
79.038
5.269
95
8
+50.9
LPG
26,813.871
1,787.591
21,006
1,751
-2.1
Propane
383.487
25.566
379
31.5
+23
TOTAL
1,189,757.321
79,317.155
854,262
71,189
-10.2
ANNUAL REPORT 2009 and financial statements 2008
of the previous financial year. This drop in sales continued the negative trend exhibited last year. The consumption of fuel oil by the power stations decreased substantially by more than 12 per cent. This is partly a reflection on the total energy demands of the country, which dropped considerably following the revision of utility tariffs, and also the result of the shift in burning gas oil, instead of heavy fuel oil. In fact the consumption of gas oil at the power stations remained at par with the previous year with only a slight drop of 0.5%. The sales figure for diesel fuel shows a drop of almost 20 per cent. This is mostly attributed to the competition being offered by other local fuel importers who have been recently licensed by the Malta Resources Authority to trade on the inland market. Till now, however, this liberalisation did not have any effect on the selling price of automotive fuels. The unleaded petrol and LRP have both shown an overall increase of more than 3% over the previous years. Individually, unleaded sales, have shown an increase of 7% while sales of LRP have dropped by more than 15%. This confirms that cars running on LRP are being replaced by vehicles running on unleaded petrol rather than diesel. In spite of the improvement in the quality of Light Heating Oil, now branded as Heating
Gas Oil, to better reflect the quality of the fuel, the sales of this product have dropped drastically by more than 35%. This is attributed directly to the stiff competition offered by other suppliers on the local market. The sales of JET A1 showed a drop of around 3.1%. This decrease is in line with a worldwide slump in the tourism industry.
Wied Dalam The works on the filtering/water separation station at Wied Dalam have been completed and the plant is now being tested. On commissioning, this station would enable JET A1 fuel to be pumped directly from Óas Saptan to Wied Dalam, thus by-passing BirΩebbu©ia. This offers the advantage of shortening the supply chain to the airport and reduce certification costs.
INSTALLATIONS 31st March 1979 Installation Development works at this Installation were kept to a minimum in view of its future relocation. In fact the resiting project is well under way. During the last months all efforts were focused on the housekeeping of the Installation. Óas-Saptan Installation Programmed maintenance works at this Installation proceeded as planned. The storage area, tunnel shafts, plant and equipment were all regularly maintained.
Another project commissioned at this Installation, is the refurbishment of the storage tanks and ancillary pipelines. This project, which includes the blasting of the external surface of the storage tanks, and the application of a protective coat, is now complete. Luqa Aviation Section The Aviation Section continued to provide a highly efficient service to aircraft calling at Luqa airport. This has been confirmed by qualified international personnel who carried out regular inspections and audits on all aspects of refuelling operations at the airport.
The storage tanks available for lease to third parties have all been rented through the year, save for a short period in the beginning of the year. Enemalta has also managed to lease all its JET A1 storage facilities. All tanks in use have now been converted to gas oil storage. Despite its age, this Installation is still serving its purpose adequately.
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Gas Division
28
ANNUAL REPORT 2009 and financial statements 2008
MAIN OBJECTIVES The main objectives of the Gas Division is to import, store and bottle Liquid Petroleum Gas, to service both the domestic and industrial needs of the entire local market. All operations are currently being conducted through the Qajjenza Depot which is located on the south coast of the island. This Depot was built in 1959 and a year later the first locally bottled gas cylinders were offered to the general public. In view of building development in close proximity of the Depot and the stringent regulations coming into force during these last years, the Corporation had to seek an alternative site to relocate its installation. In fact a new Depot is being built at Beng˙isa. The new plant to be installed here will conform to the Seveso directives and will have increased storage facilities, more modern plant for accelerated productive rates and a palletising unit which will greatly reduce the manual handling of gas cylinders. In February 2009, the distribution of Liquid Petroleum Gas and Propane both in cylinders and in bulk was taken over by Liquigas Malta Limited. Emergency services have also been taken over by the new company. All operations will be transferred to Liquigas once the new plant at Beng˙aisa is commissioned.
MAINTENANCE Even though the Qajjenza Depot is now in its final stages of operation, the ageing plant and equipment housed there, continues to be maintained to ensure that operational disruptions are kept to a minimum. Maintenance works were carried out on all storage spheres and repair works on Number 11 Tank were completed in August 2009. In view that the Depot is located very close to the sea, the condition of the storage tanks easily deteriorates especially as a result of the adverse weather conditions prevailing during the winter months. Regular maintenance is considered crucial for the smooth running of the plant. PRODUCTION Following the installation of a new carousel in October 2007, there had been a significant increase in the bottling rate of gas cylinders. In fact the bottling rate for the 12kg cylinders is about 1200 cylinders per hour. The long term plan to shift from the screwtype valves to the safer clip-on type has left its positive effect on productivity since the machinery downtime to replace the filling heads has now decreased considerably. With the introduction of the new carousel and the new production management software, production gains/losses are now completely under control giving the accuracy of filling and real time monitoring.
Other relatively minor investments, such as a production management software and a speed controller for the carousel, have had a net positive effect on the bottling capacity over the previous years. Sales of LPG Mixture and Propane (in MTs) Year
LPG
Propane
Total
1999-2000
17,256
240
17,496
2000-01
16,239
228
16,467
2001-02
16,945
223
17,168
2002-03
17,709
253
17,962
2003-04
17,916
273
18,189
2004-05
19,265
248
19,513
2005-06
20,087
316
20,403
2006-07
19,416
439
19,855
2007-08
21,659
342
22,001
2009
22,832
294
23,126
SALES The sales of Liquid Petroleum Gas in 2009, increased by more than 3% over the corresponding period last year and reached a total of 22,832 metric tonnes. The number of cylinders sold has reached the 1.3 million mark. DISTRIBUTION Following agreement between Enemalta Corporation and Liquigas Malta Limited, the distribution and emergency services were, as from 2nd February 2009, transferred to the new company. An office has also been set
29
up by Liquigas Limited at Enemalta premises at Qajjenza to handle the distribution and sales of loose LPG cylinders. The new company is currently catering for all the Liquid Petroleum Gas Distribution in Malta and Gozo, including bulk supplies to commercial and industrial entities. IMPORTS A total of 22,404 metric tonnes of Liquid Petroleum Gas mixture and 400 metric tons of commercial propane were imported during the year. In all, there had been 13 shipments and all efforts were made to put discharge operations under control to avoid unnecessary demurrage charges. One shipment was brought over with reduced quantity of product due to the extraordinary maintenance on one of the storage spheres. The Corporation’s Gas Depot at Qajjenza has a storage capacity of 2300 metric tonnes of Liquid Petroleum Gas mixture and 200 metric tons of propane. NEW SERVICES As from 1st February 2009, Liquigas Malta Limited has taken over the ownership of all gas cylinders. The issuing of new services and the purchasing of the gas cylinders are now being handled by the new company, even though the collection of relative data is still being catered for by Enemalta personnel. The quantity of cylinders being purchased is now the prerogative of the new company. The process of removing worn out cylinders from circulation was however maintained, and Enemalta employees carry
30
out inspections of cylinders, and those not deemed fit for refilling are put aside for eventual withdrawal. CONSUMER SERVICES This Section has now ceased its operations and Liquigas Malta Limited has entered into a private agreement with a third party sub-contractor for the provision of these services. A number of employees previously deployed with this Section were absorbed by the Gas Division.
Information Communication Technology
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INTEGRATED UTILITIES BUSINESS SYSTEMS (IUBS) Having recognised that its management information and ICT infrastructure required a total overhaul, Enemalta, in conjunction with the Water Services Corporation, has embarked on an Integrated Utilities Business Systems (IUBS) programme – a holistic transformation process for the two businesses, underpinned by the following ICT projects: ■ The replacement of the billing system with a new billing engine that integrates Customer Relationship Management (CRM): The new billing engine will enable new operational possibilities and new business products and services. The new system will in the coming years, become an essential platform for Enemalta to interact with its customers and efficiently manage all services being offered. ■ The replacement of existing meters with an Automated Meter Management (AMM) system, resulting in a Smart Metering grid: This will enable the Utilities to configure, operate and read meters in real time, and will eventually lead to the elimination of estimate billing, and provide the possibility of introducing new service package based on differential tariffs. ■ Smart Metering Grid will also mean that the Utilities will have access to accurate and timely consumption and trend patterns allowing them to manage operations more efficiently. ■ The replacement of the accounting and inventory system with an Enterprise Resource Planning [ERP] solution: this solution is essential to enable the Utilities to restructure themselves around
32
customer oriented business processes, rather than legacy organisational functions. In conjunction with the other elements of IUBS, it will significantly enhance the availability and timeliness of financial information to management and will provide the tools to improve management and control of the Utilities’ material resources. ■ The introduction of Data Warehousing and Business Intelligence (BI): These tools will enable the gathering, storing, analysing and access to data that will help the management to make better business decisions. ■ The introduction of a Supervisory Control and Data Acquisition (SCADA) system and infrastructure to manage Enemalta’s electricity plant. The new system will allow the Network Operations Centre to continuously monitor and collect information from Enemalta’s Distribution centres. This information forms the basis for network planning and for the operations’ engineers to plan short and long-term works, including maintenance works and network reinforcement projects. The SCADA system will also provide immediate indication of alarms and events that could result in the interruption of supply or damage to the equipment, unless timely remedial action is taken. It will also permit remote operation of the switchgear in the Distribution centres. These capabilities should result in a marked improvement in restoring supply, especially where interruptions are due to load shedding.
In January 2009 Enemalta and the Water Services Corporation set up the Automated Revenue Management System Ltd (ARMS Ltd) as a result of their strategic partnership to implement the IUBS programme. This newly formed company is responsible for the following operations at both Corporations: ■ Customer Care and the Call Centre. ■ Applications for electricity service. ■ Device Management. ■ Billing and Invoicing. ■ Cash Collection. ■ Debt Management. ■ Revenue Management. IBM, together with Enemalta, the Water Services Corporation and ARMS Ltd personnel have completed an ‘as is’ analysis of the high level business processes that are relevant to IUBS, and are now developing the ‘to be’ scenarios. Work on the configuration and build of the billing CRM and ERP applications is also well in hand, with initial phases expected to commence in January 2010. The ICT Division is actively participating in the transformation and data migration processes. Enemalta has in the meantime launched a pilot project to install 5,000 Smart Meters during 2009. This was intended to allow the Corporation to gather information and obtain feedback in order to optimize its operations during the full scale implementation of the Smart Grid.
ANNUAL REPORT 2009 and financial statements 2008
ORGANISATIONAL CHANGE – GOVERNANCE AND STRATEGY Following the appointment of a new Chief Information Officer in May 2009, the ICT Division is currently in the process of restructuring itself in order to better support business critical operations and drive business change. Recruitment and training campaigns are being launched in order to strengthen the ICT management and ensure that the Division is adequately staffed with personnel having the right skills, training and experience to meet the upcoming challenges. A comprehensive new Information Security Policy has been drawn up and this will be launched and disseminated throughout the Corporation later this year. Meanwhile, a new ICT strategy for the years 2010 – 2012 is being prepared. The new strategy will continue to enforce the vision of the ICT as a driver for business transformation at Enemalta and includes objectives to: ■ fully support the business in its drive to ensure high levels of customer centricity, operational and cost efficiency, as well as social and environmental responsibility; ■ align Enemalta with the Government’s national ICT Strategy Plan; ■ restructure and strengthen ICT governance at Enemalta to best practice levels;
INFRASTRUCTURE, SYSTEMS AND OPERATIONS Throughout the year, the ICT Division continued with its programme for modernisation and preparation for business transformation. These initiatives include: ■ the continued enhancement of the Wide Area Network (WAN), the Local Area Network (LAN) and the PABX Infrastructure, including connectivity to an additional 15 Distribution Centres, installation of structured cabling, and upgrading the Network Access Layer for improved resilience and manageability; ■ complete re-design of Intranet and Internet portals in order to enhance functionality and ease of use; ■ ICT Infrastructure and support to enable the relocation of the Credit Control Department to the Water Services Corporation premises in Luqa; ■ the implementation of an ICT Asset Management System, including tagging of all ICT assets; ■ the development of a new mobile portal, allowing subscribers to receive notifications of planned and unplanned power suspensions. The system is envisaged to be implemented by the end of the year.
■ continue to develop and strengthen Enemalta’s data centre and network infrastructure; ■ ensure high levels of ICT support to the business. .
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human resources Division
34
ANNUAL REPORT 2009 and financial statements 2008
OUR AIMS The primary aim of the Human Resources Department is to provide a high quality service which will promote an efficient, effective and supportive environment, in order to deliver the best possible results to Corporation employees. This Division is responsible for various important functions that are all vital to the Corporation. HR management has to ensure that adequately fletched staff is available in order to cope with the pressing needs of the Corporation. In this regard the recruitment and selection of employees is a vital function. The Division calls for both internal and external recruitment and its primary aim is to enroll the best people available on the market. Manpower planning involving employee development and staff movements are all catered for by this department. The HR role in manpower planning is to ensure that all employees recruited by the Corporation are capable to fit in the organisation’s structure to be of more effective assistance in the various functions. One of the more important functions of the Division is to gauge employee motivation and carry out evaluation exercises that include progression, increments and performance appraisals. While progression and increments have been thoroughly used in the past by the Corporation as motivational tools, performance appraisals is a new concept intended to step up employees’ efficiency and effort in their work.
Marsaxlokk Training Centre The end of the year 2009 marked the finalisation of a training plan based on the findings of the Training Needs Analysis (TNA) exercise, launched in 2006. This plan is intended to guide Corporation employees through a Learning process, to attain the required knowledge in the respective fields thus having a more employable and efficient work force. In order to attain this level of competency within the workforce, the training programmes are being channelled along three directions namely: strengthening the core business of the Corporation, upgrading management knowledge and boosting Health and Safety culture infusion. The strengthening of the core business was attained once consensus was reached on the method of implementation. This was achieved through collective bargaining where the need of Human Resource development was emphasized and the multi-skills concept was accepted. As a result, the Training Centre has endeavoured to train employees in disciplines which are not traditionally practised as part of their routine work. Trainees are being encouraged to attend courses intended to broaden their skills and apply them to improve efficiency in their work output. Another agreement which has been implemented during 2009, was the Aviation Restructuring Agreement which broadened the skills and sphere of duties of the Aviation crewmen. The Training Centre played a major role in the implementation of this Agreement
as it prepared the relative course content and the logistics for the training of staff, in order to be submitted for assessment and eventual certification. The delivered training ranged from new skills in the dispatch of fuel for aircrafts to computer training and communication skills. The training given, allowed the newly appointed Senior Aviation Crewmen to offer a service not offered previously to Enemalta customers. Other support activities within the Aviation Section created other opportunities for staff to advance in their careers while upgrading the service offered. The Centre was also given the opportunity to actively participate in the introduction of the Integrated Business Systems (IUBS) venture between Enemalta and the Water Services Corporation by providing adequate training on the Automated Meter Management Enterprise resources planning and Customer Relationship Management. One of the critical success factors of this project was the relative transfer of knowledge of the key process owners and end users. With a view to attain the desired results, the process was meticulously planned, executed and monitored. The Training Centre has also offered opportunities to employees to broaden their knowledge in subjects not necessarily linked with their sphere of duties within the Corporation. Enemalta employees were given training free of charge after their normal work schedules. This initiative helped these employees to learn about subjects which may open new career paths within the Corporation or otherwise improve their skills
35
in the respective fields. The interest shown, has encouraged management at the Training Centre, to offer this opportunity again next year. As an on-going exercise, the Centre continued to provide training in the Health and Safety field, with particular emphasis to emergency response. As one of the major heavy industries in Malta, Enemalta has undertaken the task of training its staff at the Power Stations to respond to incidents emanating from generation plant. Regular drills were carried out, to retain the trained staff in readiness to respond to emergency calls. At professional level, the core business has been strengthened by offering opportunities to the staff to undertake undergraduate and post-graduate studies, through distance learning, in the engineering and administration fields. In-house training was also given as part of the continuous professional development in engineering and management, by inviting experts in the field to seminars, which included practical sessions, to enhance understanding of the subject. While the Centre continues to provide training at all levels of the organisation, its main aim remains that of exploring new methods of learning, to add value to the service being given. In fact, a new training programme is being scheduled to commence next year.
Welfare Section This Section continually offers support to employees and their families in helping them cope with problems they may encounter from time to time.
36
With the help of CARITAS representatives, an Employee Assistance Programme (EAP) has been introduced to provide professional counselling to employees with work related problems. Managers and supervisory staff were given talks on how to identify persons who are going through some difficulty and see how these employees can be approached. The Welfare Section regularly organises talks to Corporation employees encouraging them to lifelong learning. Several social functions are organised to improve the social element among the Enemalta staff. This Section also handles the Private Health Scheme, which is widely utilized by Corporation employees and their families.
Customer Care Section Since its inception, the Customer Care Section has offered valuable assistance to the many Enemalta customers in an efficient and satisfactory manner. The Section has now established itself as a fully functional Centre, adequately geared to handle enquires and offer quality service to the public. During the past months, the Customer Care Section was fully focused on providing assistance and giving information to the newly formed Automated Revenue Management Systems Ltd (ARMS). Regular workshops and meetings were held on this major exercise. The Section handles more than 3,000 queries each month. It also keeps liaison with all Corporation Departments to ensure that claims received are attended to in the shortest time possible. The Customer Care Section will undoubtedly feature prominently
in the Corporation’s vision to develop the one-stop-shop service being planned by ARMS Ltd in the coming months.
Health and Safety The past months were characterised with intensive activities aimed at upgrading the health and safety standards across the Corporation. The Health and Safety Section is in constant liaison with the Occupational, Health and Safety Authority to ensure that all safeguards contained in local and European legislation are adhered to by Enemalta employees. Regular consultations are held at all management levels, to have wide consensus on all programmed health and safety objectives. The Enforcement Unit within this Section, ensures that employees at work are not at risk and they do not pose any danger to others. Officers from this Unit also provide consultations on the proper use of the Personal Protective Equipment (PPE). Other initiatives undertaken include: ■ provision of a detailed inventory of all Corporation sanitary facilities across the Corporation premises to provide the required refurbishments; ■ a strategy outlining the required occupational safety signs within all Corporation sites; ■ one-to-one meetings with Corporation employees to ensure understanding and adherence to Health and Safety initiatives.
ANNUAL REPORT 2009 and financial statements 2008
As in previous years, health and safety programmes were conducted and aimed at reducing injuries at the place of work. This was reflected in a lesser number of injuries being reported. Medical services continued to be provided to ensure that both clinics at Marsa and Delimara Power Stations were kept at the required standards. Other services coordinated by this Section included health surveillance and screening of Corporation employees, vaccinations and blood tests. The Health and Safety Section formed part of the emergency pandemic contingency plan set-up, and held periodic meetings with Government entities to ensure that WHO recommendations are being followed.
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estate management division
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ANNUAL REPORT 2009 and financial statements 2008
RESTRUCTURING The Estate Management Division has been restructured and it is now a separate department, no longer amalgamated with the Human Resources Section. A Chief Officer has been recruited to manage this Department which has now taken over other Sections within its ranks. During the outgoing year, the Estate Management Division managed to take a detailed stock of all major Corporation properties and with the assistance of the Land Department managed to compile a detailed register of these properties. The complete Property Register, including more than one thousand substations and other minor properties currently managed by the Corporation, is expected to be completed shortly. The Division finalised several acquisition procedures required for the construction of substations and continued to offer assistance to other Corporation officials involved in the privatization process.
Fire and Safety Section This Section provides emergency response and stand-by services to all the Divisions of the Corporation. During the past months this Unit attended to several incidents, at times in extraordinary circumstances, assisted by the Civil Protection Department. The core activity at this Section is the routine checking and maintenance of all equipment
installed across the Corporation, including hydrant systems, automatic extinguishing systems, fire alarms and other portable equipment. Fire cover was also provided at various sites for potentially dangerous welding works particularly at the Gas Division. Emergency signage continued to be updated to meet current standards and all efforts are being made to abide to existing legislation in this regard. A wider on-going process is currently in hand to update fire safety at the various sites. Besides the updating of safety signs (means of escape), advice is also being given on the implementation of the required safety measures. The Fire Section is also involved in the carrying out of risk assessments with regards to gas hazards and rescue plans for confined spaces. Statutory inspections were conducted by the competent authorities in compliance with the SEVESO II directive and recommendations were followed up as required. Major exercises are being organised in-house, in conjunction with other agencies. These include major oil spill exercises at Delimara and Fire drills at Marsa and Delimara Power Stations and at the Gas Division. The Fire and Safety Section is a small but efficient unit which offers a wide range of services to all Corporation sites, primarily to ensure maximum safety to employees at their place of work.
Library and Archives Section The Enemalta Library and Archives Section was set up primarily to collect, index and catalogue the entire reference material under one roof. Apart from Corporation employees, this Section also offers research facilities to various local institutions, including the University. The last months saw a considerable increase in the number of students visiting the library particularly from the Technical Institute. Many students find the material available particularly useful when preparing their assignments and thesis, in part fulfilment of their studies. The Library and Archives Section today houses more than 25,000 books, standards, reports, contracts and journals. There are also a number of documents in CD format, DVDs and videos. A collection of thesis by various students and Enemalta employees is also available at these premises. A large collection of documents which was left at the Corradino Naval Power Station way back in the seventies was restored and added to the Melitensia Section. The library also holds a large collection of photographs, some of which date back to the late 19th century. Other photographs highlight important events in the history of energy in the Maltese Islands during the last sixty years. So far, more than 4,000 photographs were indexed and catalogued.
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Transport Section During the year, Enemalta updated its transport fleet by purchasing sixty-five new vehicles. These vehicles are all equipped with modern engine technology and Enemalta mechanics were given specialised courses to improve their skills in the required maintenance and repairs. The Transport Section services all vehicles under its charge every three months, thus ensuring maximum safety. Preventive inspections are also carried out on all Tower Ladders which are mainly used by the Distribution Section. A new power-washer was installed, and its primary aim is to have cleaner vehicles on the road, thus boosting the Corporation’s image with the general public.
Legal Office The Legal Office has, during 2009, hired another Professional Executive to reinforce its staff and assist in the many judicial proceedings in which the Corporation is currently involved. This Office also continued to provide Legal advice on all aspects of the Corporation’s activities ranging from issues of commercial, industrial, civil, and penal nature, as well as reviewing Directives issued by the European Union. The particularly significant tasks undertaken by this Office during 2009 included the drafting of Legal Notices amending the Electricity Supply Regulations, assistance on Legal issues arising during the adjudication process of various significant tenders, as well as the commercialisation process of the Corporation’s Petroleum and Gas Divisions.
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ANNUAL REPORT 2009 and financial statements 2008
commercial division
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new division This is one of the newly established Divisions during 2009, in line with the new management structure of the Corporation. It has taken over the work previously carried out by three Departments, namely Procurement, Stores and Sales Sections. The Division is headed by a Chief Commercial Officer, also a newly created post.
PROCUREMENT The Procurement Section experienced a lot of changes during the past months. At the beginning of the year, the Open Plan Phase II project was inaugurated and the Section moved to the new premises. The Section processed several large tenders and various awards were made. These included the new generation plant at Delimara power station, the switchgear for the Tarxien Distribution Centre and the 132kV cable between Marsa Distribution Centre and Delimara Power Station. Other tenders were taken in hand and these included the Marine Survey between Malta and Sicily and the cable interconnection between Malta and the European grid. Two engineers joined the Department during 2009, bringing the number of engineers to four, all with their own specialisation. These engineers are involved in the preparation of tender specifications, adjudication of tenders, and in the certification of goods received. A centralised procurement procedure was implemented during the third quarter
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of 2009. This was possible following the amalgamation of this Section with the Stores Section into one unit. The reorganisation of the Procurement Section was implemented towards the end of the year. The previous organisational structure was changed and this brought changes in the job descriptions of some employees as well as changes in the reporting lines. These changes are envisaged to be reflected in increased efficiency to render the Department better equipped to cope with the ever increasing work load, especially in the amount of EU tenders being published and processed.
managed. The stock lists for all stores have now been amalgamated in order to control better the movement of stocks and save from economies of scale. This intensive exercise served to ensure that stock data migrated to the new SAP Integrated Business System was clean data. Another priority was the reduction in the amount of the stock value, by identifying non-moving stock items and take appropriate action to scrap same. Particular attention was given to the A11 Stores which needed a major overhaul both in terms of the organisation of its various stock locations but also in the fine-tuning of its operations.
STORES SECTION
SALES
The new Stores Section was set up in June 2009. This took over the operations of the four major stores locations of the Corporation namely, the Generation Store at Marsa known as the A11 store, the Generation Store at Delimara, the General Stores at Marsa and the Corradino Stores. These Stores were previously managed as four different entities operating independently from each other. A new management structure within the Commercial Division was set up to manage these stores. A Stores co-ordinator was appointed following an internal call for applications. An external call for the post of Stores Manager was issued since the post could not be filled internally. The recruitment process was expected to be completed by the end of the year. One priority for this Department during the past months was to align the operations of the four store locations, so that these can be centrally
The Sales Section coordinates with the Distribution and Development Sections for the issue of quotations to clients for projects that include Distributions Centres, electricity substations and new services that due to their nature are not covered by the Corporation standard rates. This Section ensures that all clients are billed within the parameters of the Electricity Supply Regulations. During the past year, a total of 307 quotations were issued. The Section also handled 169 cases of damage to Corporation property by third parties.
FINANCE division
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supporting the operations of the Corporation The Finance Division manages the Corporation’s accounting systems and credit control. It also manages the Corporation’s treasury functions and internal control systems. FINANCIAL REVIEW FOR THE PERIOD ENDED 31 DECEMBER 2008 In accordance with the provision of the Enemalta Act, the Corporation has changed its financial year end from 30 September to 31 December. The first reporting period affected by this decision relates to fifteen months from 1 October 2007 to 31 December 2008. The financial year starting 1 January 2009 shall revert to a twelve month period. The events experienced during the financial period ended 31 December 2008 have placed a significant strain on the Corporation’s financial resources. Tough but necessary measures were taken to bring to an end the undesirable impact of fuel price increases on the operations and finances of the Corporation that impacted the 2008 results through tariff revisions. The Corporation registered a loss after tax of €46,601,000 for the 15-month period ended 31 December 2008, compared to a loss of €16,529,000 reported in the previous 12-month period ended 30 September 2007. The shift in profitability of €30,072,000 is principally due to operational reasons, mainly
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attributable to the increase in the cost of fuel. The price of fuel on the international market increased significantly from the previous reporting period. In 2008, Ice Brent average was $98, when compared to $78 in 2007. The Electricity division reported an operating loss of €20,209,000 a shift of €27,594,000 over the operating profit of €7,385,000 in the previous reporting period. Revenue increased by €117,147,000 in view of a higher fuel surcharge and the introduction of the new tariff structure. The cost of generation increased by €137,208,000 to €307,842,000. Transmission and distribution costs increased from €19,846,000 to €25,440,000 while administrative expenses increased from €12,484,000 to €16,502,000. Besides the impact of the change in the monthly reported periods being disclosed, and the increase in fuel costs, the other main contributor to these major shifts was payroll expenses. The Petroleum division was impacted by major fuel increases that were not reflected in the Petroleum product prices, thus resulting in an operating loss before impairment charges of €4,237,000. In 2008, the Corporation recognised an impairment on the Petroleum division’s property, plant and equipment of €7,719,000 which is mainly attributable to land and operational property. The related assets have been written down to their estimated recoverable amounts based on the management’s best estimate. The Gas division remained loss making, with an increased operating loss of €5,429,000
compared to a loss of €1,202,000 in 2007. This was the result of increased purchasing costs of liquefied petroleum gas and commissions to distributors. On 27 November 2008, a number of agreements were signed between the Corporation, Gasco Energy Limited and Liquigas Malta Limited for the commercialisation of the Gas Division. Under the terms of these agreements the Corporation sub-leased the land at Benghajsa to Gasco Energy Limited for a period of 33 years. During the period under review, the Corporation increased its properties by €8.3 million of which €6.8 million were transferred from the Government of Malta. A further €22.5 million in plant and equipment, largely in transmission and distribution equipment were invested by the Corporation. Operational losses, movements in working capital and capital assets have largely been financed by external borrowings. These increased from €322.2 million to €424.5 million.
ANNUAL REPORT 2009 and financial statements 2008
Financial Highlights for the last 5 years Year ended Year ended Year ended Year ended 30 September 30 September 30 September 30 September 2003/4 2004/5 2005/6 2006/7 € ’000 € ’000 € ’000 € ’000 Summary P&L Turnover (net of subventions) 306,925 326,965 456,275 451,740 Fuel costs (176,634) (241,386) (327,789) (310,149) Government subventions - 19,359 49,700 41,957 Excise duty (56,275) (58,747) (72,509) (83,713) Staff costs (34,465) (33,892) (33,664) (34,694) Other operating costs (58,933) (59,634) (63,727) (64,048) Other operating income 6,150 8,400 9,793 10,776 Operating profit / (loss) Finance costs Non-operating costs
(13,233) (12,763) -
(2,935) (12,269) -
18,078 (12,124) -
Period from 1 October 2007 to 31 December 2008 € ’000 690,654 (579,527) 76,815 (103,912) (,45,576) (88,269) 12,221
11,868 (14,274) (14,074)
(37,594) (21,753) -
Profit / (loss) before tax (25,996) (15,204) 5,954 (16,480) Year ended Year ended Year ended Year ended 30 September 30 September 30 September 30 September 2003/4 2004/5 2005/6 2006/7 € ’000 € ’000 € ’000 € ’000 Segmental results
(59,347)
Electricity Division Turnover 127,580 148,095 206,261 202,553 Operating profit / (loss) (29,737) (23,312) (2,225) 7,384 Petroleum Division Turnover (net of inter-divisional) 172,243 207,133 242,015 241,710 Operating profit / (loss) 19,716 20,023 18,344 5,686 Gas Division Turnover 7,102 7,738 7,999 7,469 Operating profit / (loss) (3,212) 354 (2,490 (1,202) Corporation Turnover 306,925 362,965 456,275 451,740 Operating profit / (loss) (13,233) (2,935) (18,078) 11,868
Period from 1 October 2007 to 31 December 2008 € ’000
319,700 (20,209)
360,016 (11,956)
10,938 (5,429)
690,654 (37,594)
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Period from 1 October Year ended Year ended Year ended Year ended 2007 to 30 September 30 September 30 September 30 September 31 December 2003/4 2004/5 2005/6 2006/7 2008 € ’000 € ’000 € ’000 € ’000 € ’000 Capital Expenditure by Division Electricity 14,342 13,492 12,492 55,178 29,180 Petroleum 1,426 1,058 228 3,131 712 Gas 368 950 1,032 1,752 950 Corporation 16,136 15,500 13,522 60,061 30,842 Period from 1 October Year ended Year ended Year ended Year ended 2007 to 30 September 30 September 30 September 30 September 31 December 2003/4 2004/5 2005/6 2006/7 2008 € ’000 € ’000 € ’000 € ’000 € ’000 Cash-flow & Financing Operating profit Non-cash items Working capital changes
(13,233) 28,267 2,690
(2,935) 12,353 20,296
18,078 7,410 (40,769)
11,869 19,485 7,144
(37,594) 49,424 (67,770)
Cash-flow from operations Financial costs Investing activities
17,724 (11,433) (16,136)
29,713 (12,332) (14,125)
(15,281) (12,269) (13,445)
38,498 (14,274) (15,395)
(55,940) (21,815) (23,963)
Net cash-requirements
(9,844)
3,256
(40,995)
8,828
(101,718)
Funded by: Bank loans increases / (decreases) 4,184 56,797 46,145 (7,785) Cash and overdrafts increases / (decreases) 5,660 (60,054) (5,150) (1,044) 9,844 (3,256) 40,995 (8,828) Net borrowing at the end of year 265,022 279,022 327,133 322,164
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33,965 67,753 101,718 424,507
ANNUAL REPORT 2009 and financial statements 2008
Due to the change in financial year end from 30 September to 31 December, the period ending 31 December 2008 covered 15 months. In order to be able to graphically compare the units sent to the grid by period, the data for the 15 months ending 31 December 2008 was annualised as per below by taking an average for 12 months.
actual Quotations
12 months
Period
Number of Months
KWh’000
KWh’000
2003/4
12 months
2,087,115
2,087,115
2004/5
12 months
2,132,140
2,132,140
2005/6
12 months
2,129,961
2,129,961
2006/7
12 months
2,133,457
2,133,457
2007/8
12 months
2,710,356
2,168,277
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Units generated but not Billed Due to the change in financial year end from 30 September to 31 December, the period ending 31 December 2008 covered 15 months. In order to be able to graphically compare the units generated but not billed by period, the data for the 15 months ending 31 December 2008 was annualised as per below by taking an average for 12 months.
actual
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12 months
Period
Number of Months
KWh’000
% of the total units sent out
KWh’000
2003/4
12 months
365,750
17.5
365,750
2004/5
12 months
337,791
15.8
337,791
2005/6
12 months
276,944
13.0
276,944
2006/7
12 months
279,486
13.1
279,486
2007/8
12 months
336,613
12.4
269,290
FINANCIAL STATEMENTS
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